| Wed 3 Oct 2007, 11:22 | | AFO - Aflease Gold Announces Enlarged 180 000 Oz P |
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AFO
AFO
AFO - Aflease Gold Announces Enlarged 180 000 Oz Per Annum Modder
East Gold Project
AFLEASE GOLD LIMITED
(Formerly Sub Nigel Gold Mining Company Limited)
Incorporated in the Republic of South Africa
(Registration number: 1984/006179/08)
Share code: AFO (JSE) AFSGY - International PrimeQX (OTCQX)
ISIN: ZAE000075867
("Aflease Gold")
October 3, 2007
Aflease Gold Announces Enlarged 180 000 oz per annum Modder East Gold Project
Johannesburg, South Africa - Aflease Gold Limited ("Aflease Gold") is pleased
to announce the results from an updated and fully revised audited feasibility
study on the Modder East Gold Project ("Modder East") located approximately 30
kilometres east of Johannesburg. The study was carried out by Turgis
Consulting (Pty) Ltd. and independently audited by SRK Consulting (South
Africa) (Pty) Limited. The valuation date of the study is September 1, 2007.
The NPV of the project is ZAR 2.335 billion (US$ 334 million) at a gold price
of US$ 720 per ounce, an exchange rate of US$ 1.00: ZAR 7.00 and a 0% discount
rate. At an 8% discount rate, the NPV is ZAR 1.418 billion (US$ 203 million).
The after-tax IRR of the project is 55.5%.
Based on the original feasibility study assumptions of a gold price of US$ 629
per ounce and an exchange rate of US$ 1.00: ZAR 6.585, the highlights of the
revised feasibility study are:
- A 27% increase in probable reserves to 1.36 million ounces of gold
(contained within 7.7 million tonnes of ore at an average head grade of
5.51 g/t) from 1.07 million ounces of gold (contained within 6.68 million
tonnes of ore at an average head grade of 5.00 g/t) in the original
feasibility study.
- Average production at steady state (2012 to 2014) increases by 65% to
181,000 ounces of gold per annum from 110,000 ounces of gold per annum.
- Life of mine average cash operating cost has decreased by 3% to US$211 per
ounce from US$217 per ounce.
- Remaining construction capital expenditure, including contingencies, is
estimated at ZAR 687 million (US$ 104 million).
- A 91% improvement in NPV at an 8% discount rate, from ZAR 484 million (US$
73 million) to ZAR 925 million (US$ 140 million).
- A 34.5% improvement in after-tax IRR, from 31% to 41.7%.
Project payback is 4.3 years and slightly less than 3 years from the start
of on-reef development.
- The first gold pour remains on schedule for Q3 2009 with a minimum 8 year
mine life.
Capital costs of ZAR 85.6 million (US$ 13 million) incurred prior to September
1, 2007 have not been included in the revised feasibility study.
The revised feasibility study incorporates an expanded mining and gold plant
operation with a designed production capacity of 100,000 tonnes per month as
opposed to 70,000 tonnes per month as per the original feasibility study. The
mine will process 7.7 million tonnes of ore through the plant over an 8 year
period at an average mill head grade of 5.51g/t of gold, producing 1,204,000
ounces of gold, a 27% increase over the original feasibility study gold
production estimate. The mine plan has been developed by applying a one metre
mining cut to all stoping areas. Mining will take place between 300 and 530
metres below surface.
During the construction phase Aflease Gold will continue with exploration
targeted on the Kimberley Reef horizon, which remains largely unexplored with
significant upside.
Neal Froneman, President and CEO of Aflease Gold commented:
"We are delighted with the positive outcome of the revised feasibility study
for our flagship Modder East development project. The larger scale of the
operation at 100,000 tonnes per month has demonstrated a significant increase
in the IRR and NPV for the project. Modder East provides the foundation for
Aflease Gold to achieve its vision of becoming a significant mid-tier, high
quality gold producer."
Background information on Modder East can be obtained from the report entitled
An Independent Technical Report on the Modder East Gold Project, located near
Springs, Gauteng Province, Republic of South Africa dated August 31, 2006 as
amended October 26, 2006 compiled by SRK Consulting. This report can be
accessed via the Aflease Gold website (www.afleasegold.com).
Mineral Resources and Reserves
- The main components of the Modder East Mineral Resource are:
- The Black Reef Buckshot Pyrite Leader Zone (BPLZ).
- The Black Reef Channel Facies (Channel Facies).
- The Blanket Facies (BF).
- The UK9A Kimberley Reef (UK9A).
- The UK5A Kimberley Reef (UK5A).
The Black Reef comprises three facies. At the top is the higher grade BPLZ,
which averages 0.5 metres in width and is the primary mining target. The BPLZ
is a placer deposit, with gold present within a heavy mineral suite dominated
by pyrite and hosted within a conglomerate. Continuity of mineralization in the
target area has been confirmed, with the zone of mineralization clearly visible
within drillhole cores. The BPLZ overlies the BF, a 1.3 metre thick quartzite
which has not been targeted due to its very low gold grades. At the base of the
Black Reef is the 3 metre thick, erosional Channel Facies. The Black Reef dips
at approximately 3 to the south.
The UK9A is a narrow channel reef, commonly characterized by the presence of
kerogen, either as lamina partings or as flyspeck carbon within the
conglomerate reef unit. The UK5A is a multi-stacked package of robust
conglomerates. The reefs dip at approximately 12 to the south.
The Black Reef is developed at approximately 300 metres below surface, while
the sub-cropping Kimberley (UK9A and UK5A) reefs reach maximum depths of
approximately 600 metres. The mineralized horizons are considered to be
structurally simple and generally well-understood, as a result of a long
history of mining the underlying Main Reef on the East Rand and the selective
mining of the UK9A at adjacent operations.
The BPLZ resource estimate is based on diamond boreholes drilled by Aflease
Gold and the previous owners of the project Gencor, and declustered underground
channel samples from the adjacent UC prospect area. The database consists of 51
drillholes (excluding deflections) and 238 underground channel samples
declustered (i.e. averaged) within 50m 50m squares from 16,694 sample points.
The methodology employed in the resource estimation is similar to that applied
in the previous resource estimate.
The Channel Facies consists of a sequence of pyrite-rich quartzites, pebbly
quartzites and conglomerates, is approximately 3 metres in thickness, and is
separated from the overlying BPLZ by the BF. The Channel Facies is erosional
into its footwall and estimates have been developed for the Channel Facies over
the footprint of the mineralized BPLZ that has been delineated.
Pillars remaining in the UC prospect area have been included in the resource
estimate. The estimate is based on the declustered values as well as outlines
of the remnants obtained from plans of adjacent operations. The pillars are all
within the higher grade area close to the `Shoreline` feature, and are
generally surrounded by sampling data on all sides. Given the relative density
of data, Ordinary Kriging has been applied rather than the Simple Kriging used
in the other estimates.
In addition to the Black Reef, Aflease Gold has also delineated mineral
resources on the UK9A and the UK5A reefs lying within the footwall of the Black
Reef. A dataset consisting of 171,000 underground channel samples within
stoping and development immediately south of the Modder East project area is
available as an analogue to the payshoot that has been intersected on Modder
East.
The estimation process for the Kimberley reefs is the same as that described
above for the BPLZ, with 45 intersections (excluding deflections) being used in
the estimate.
The UK5A has also been sampled by diamond drilling within the UC prospect area.
A basal unit of conglomerate within the UK5A package has been identified with
an average grade of approximately 1.5 g/t and a mineralized width of
approximately 3 metres. Seven diamond drill holes have intersected the UK5A and
an Inferred Mineral Resource has been developed from these data, using the
variogram models developed from the UK9A as analogues for the estimation of the
UK5A.
The Mineral Resource estimates for Modder East are shown in Table 1. The BPLZ
and UK9A reefs have been modeled at a minimum mining width of 1 metre.
Table 1: Mineral Resource Estimates for Modder East effective 31 October 2006.
Tonnes Grade Metal
(Mt) (g/t) Content
(Moz)
Indicated
1BPLZ+BF 7.38 5.82 1.38
2Channel +BF 17.54 1.25 0.7
1BPLZ pillars 0.27 8.33 0.07
3UK9A 3.64 4.1 0.48
4UK5A n/a n/a n/a
Subtotal Indicated 28.83 2.84 2.64
Inferred
1BPLZ+BF 0.65 1.98 0.04
2Channel +BF 2.15 1.83 0.13
3UK9A 2.77 3.58 0.32
4UK5A 9.41 1.82 0.55
Subtotal Inferred 14.98 2.15 1.04
1 Quoted at a cut-
off of 167cmg/t
2 Quoted at a cut-
off of 379 cmg/t
3 Quoted at a cut-
off of 199 cmg/t
4 Quoted at a cut-
off of 496 cmg/t
Notes:
1. The mineral resources have been reported in accordance with the
classification criteria of the South African Code for Reporting of Mineral
Resources and Mineral Reserves (the "SAMREC Code").
2. Mineral reserves are included in mineral resources.
3. The resource estimate was prepared by Charles Muller, B.Sc. (Hons),
Pr.Sci.Nat., of Global Geo Services (now with Minxcon), an independent
geoscience consultant to Aflease Gold. Charles Muller is a qualified
person for the purposes of NI 43-101. The resource was audited by Mark
Wanless of SRK Consulting.
4. In the opinion of SRK, the mineral resource classifications defined in the
SAMREC code are materially similar to those defined in Standards on
Mineral Resources and Reserves Definitions and Guidelines adopted by
Canadian Institute of Mining, Metallurgy and Petroleum utilized by
Canadian National Instrument 43-101.
5. Mineral resources are not mineral reserves and do not have demonstrated
economic viability.
The updated reserve for Modder East was generated as follows:
Pay limits were calculated for the mining of the BPLZ and UK9A reefs based on
the following criteria:
- Gold price - US$ 629.00 per oz
- Exchange rate - US$ 1.00 : ZAR 6.585
- Operating cost - ZAR 205.90 per tonne mined
Using these parameters, the following pay limits were obtained:
- Narrow reef mining on BPLZ horizon: 2.0 g/t.
- UK9A (Kimberley Reef) mining: 2.20 g/t.
The final cut-off grade applied in the mine plan was selected by optimizing the
mine plan to produce the maximum NPV of the project. The selected cut-off grade
was 2.3g/t (in situ stope grade).
This cut-off grade was applied to the resource estimate to determine which
stope panels to include in the revised mine plan, and consequently in the
reserve.
In declaring the resource considered for mining the following points are
pertinent:
- The BPLZ + BF resource has been declared at a width of 100cm.
- The UK9A resource has been declared at a width of 100 cm.
- An area of 155,860m2 of the UK9A resource was not included in the mine
plan as no structural model was available for this area.
- The UK5A resource is all in the inferred category and has not been
included in the mine plan.
- The Channel Facies, as declared in the resource statement, does not meet -
the cut-off grade selected for mining, so no mining of the Channel Facies
is planned.
- No mining of the BPLZ pillars in the Tribute area was considered in the
mine plan.
The resources considered for mining are summarized in Table 2.
Table 2: Mineral Resource considered for mining effective July 13, 2007.
Reef Resource Cut- Evaluation Gold Gold
Type Category off Width (cm) Tonnes Grade Content
Grade (t) (g/t) (Moz)
(g/t)
BPLZ + Indicated 2.3 100 5.34 7.31 1.25
BF
UK9A Indicated 2.3 100 2.58 3.97 0.33
Total Indicated - - 7.92 6.22 1.58
Notes:
1. The mineral resources have been reported in accordance with the
classification criteria of the SAMREC Code.
2. The resource estimate was prepared by Charles Muller, B.Sc. (Hons),
Pr.Sci.Nat., of Global Geo Services (now with Minxcon), an independent
geoscience consultant to Aflease Gold. Charles Muller is a qualified
person for the purposes of NI 43-101. The resource was audited by Mark
Wanless of SRK Consulting.
3. Mineral reserves are included in mineral resources.
4. In the opinion of SRK, the mineral resource classifications defined in the
SAMREC code are materially similar to those defined in Standards on
Mineral Resources and Reserves Definitions and Guidelines adopted by
Canadian Institute of Mining, Metallurgy and Petroleum utilized by
Canadian National Instrument 43-101.
5. Mineral resources are not mineral reserves and do not have demonstrated
economic viability.
The resource tonnage for the BPLZ was modified in the following manner to
create the reserve tonnage:
- The resource tonnage was modified for major geological losses. These
losses were modeled in the structural model of the ore body and, in laying
out stopes, the major geological loss structures were avoided.
- The resource tonnage left as pillars was subtracted from the tonnage to be
mined. This was equivalent to a loss of 10 per cent of the tonnage.
- All planned dilution in the form of gullies, winch beds, and so on was
calculated and added to the tonnage. The dilution calculations resulted in
a tramming width of 108 cm. The resource was modeled at 100 cm. Therefore
an additional 8 per cent dilution was added to the resource to generate a
reserve.
The resource tonnage for the UK9A was modified in the following manner to
create the reserve tonnage:
- The resource tonnage was modified for major geological losses. These
losses were modeled in the structural model of the ore body and, in laying
out stopes, the major geological loss structures were avoided.
- The resource tonnage left as pillars was subtracted from the tonnage to be
mined. This was equivalent to a loss of 11 per cent of the tonnage.
- The tramming width was calculated to be 108 cm. This includes all planned
and un-planned dilution.
The resource grade was modified in the following manner to produce the reserve
grade. This methodology was common to both reef types.
- When the allowance for dilution was made, it was assumed that the dilution
had zero grade. The grade was adjusted according to the amount of mining
dilution added to the resource as discussed for each reef type above.
- An allowance of 1 per cent internal geological loss was allowed for at
zero grade reducing the grade by 1 per cent. This estimate is based on
experience gained mining the BPLZ and Kimberley Reefs at adjacent
operations.
- An allowance of 2 per cent was made for physical gold losses. Grades were
adjusted accordingly. This loss factor has been determined by Aflease Gold
after discussions with their independent engineers.
The reserve was generated according to the guidelines of the SAMREC code and is
reported as Run-of-Mine (RoM) tonnages and grades in Table 3.
Table 3: Mineral Reserve statement effective July 13, 2007.
Reef Reserve Mined Gold Gold Gold
Type Category Tonnes Content Content Grade
(t) (g) (oz) (g/t)
BPLZ Probable 5,389,600 32,833,610 1,055,625 6.09
UK9A Probable 2,260,993 9,338,565 300,242 4.13
Total Probable 7,650,593 42,172,175 1,355,867 5.51
Notes:
1. The mineral reserves have been reported in accordance with the
classification criteria of the SAMREC Code.
2. The revised reserve statement was prepared by Clive Brown of Turgis
Consulting and audited by Herbert (Wally) Waldeck of SRK Consulting. The
gold content figures are fully inclusive of mining dilutions and gold
losses and are reported as mill delivered tonnes and head grade.
Metallurgical recovery factors have not been applied to the reserve
figures.
3. In the opinion of SRK, the mineral reserve classifications defined in the
SAMREC code are materially similar to those defined in Standards on
Mineral Resources and Reserves Definitions and Guidelines adopted by
Canadian Institute of Mining, Metallurgy and Petroleum utilized by
Canadian National Instrument 43-101.
Mine Design
The reefs will be accessed by a decline from surface, developed into the
footwall of both horizons utilising trackless drilling, loading and hauling
methods. Mine personnel will access the workings via a vertical ventilation
shaft. The traditional South African narrow reef breast mining method,
utilising scraper winches for stope cleaning operations, will be used. Thirty
tonne haul trucks will be used to transport ore, loaded from stope chutes, to a
central silo system. Dedicated fifty tonne haul trucks will then transport the
ore from the silos to surface.
The Modder East gold plant is based on a standard carbon-in-leach gold recovery
process. The plant is designed to treat 1,200,000 tonnes of ore per annum,
yielding approximately 181,000 ounces of gold annually at steady state. The
metallurgical recoveries are 87% for the BPLZ reef and 95% for the UK9A reef.
Project Status
Prior to the completion of the original feasibility study, Aflease Gold decided
to fast-track the project and the initial construction began on May 18, 2006.
In August 2006, following the completion of the feasibility study and the audit
thereof by independent engineering consultants SRK Consulting, the Board
formally approved both the project and construction capital expenditures of ZAR
207 million.
In September 2007 the Board approved the revised feasibility study and
additional construction capital expenditures to complete the project. The
additional capital required is expected to be raised by means of a combination
of debt and equity.
The construction of the portal has been completed and the trackless decline has
advanced 1,200 metres. The surface infrastructure for the development of the
decline, including offices, change rooms, lamp room, workshops, waste rock dump
and dams has been completed.
Construction of the gold plant and the sinking of the vertical ventilation
shaft are scheduled to begin in Q4 2007.
The project is on schedule for the commencement of gold production in Q3 2009.
Operating Costs
The operating costs have been prepared using zero-based costing techniques
(i.e., without factoring-in historical costs), assuming reasonable consumable
consumption levels and are in September 1, 2007 money terms.
The average operating cost for the life of mine is ZAR 218.33 per tonne of ore
milled. Conversion of the capitalized development costs into an operating cost
increases the average life of mine cost to ZAR 342.50 per tonne of ore milled,
which compares favourably with other South African shallow, narrow reef
operations.
Capital Costs
Capital costs have been estimated at the appropriate level with the back up of
budgetary quotes from major equipment suppliers. The capital estimate for the
plant is based on the use of new equipment. The capital costs were estimated in
South African Rand as at June 2007. The remaining project capital expenditure
required totals ZAR 687 million (shown in Table 4). In addition, the ongoing
and bridging capital totals ZAR 263 million.
Table 4: Modder East Project - Remaining capital expenditure estimates (at
September 1, 2007)
Capital Item Remaining Ongoing & Total
Project Bridging Capital
Capital Capital Requireme
(ZAR (ZAR nts (ZAR
000`s) 000`s) 000`s)
Surface engineering 94,499 16,694 111,193
Capital development 89,622 141,044 230,666
Mining equipment 31,672 61,075 92,747
Shaft sinking 105,565 24,368 129,933
Underground engineering 18,485 - 18,485
Process plant 231,035 - 231,035
Tailings dam 19,421 - 19,421
Preproduction costs 34,292 - 34,292
Environmental (Initial 1,911 - 1,911
Sum)
Contingencies 59,882 20,450 80,332
Total Modder East 950,015
686,384 263,631
Note: Construction capital cost of ZAR 85.6 million (US$ 13 million) expensed
up to September 1, 2007, has been excluded in Table 4.
Financial Evaluation
The project has been valued in real terms as at September 1, 2007. At a real
discount rate of 8%, the project is estimated to yield an after-tax NPV of ZAR
924.6 million and an after-tax IRR of 41.7%. Project payback from the
evaluation date is estimated to be 4.3 years. Table 5 summarizes the results of
the revised feasibility study.
Table 5: Modder East Project - real cash flow model.
2007 2008 2009 2010 2011
BPLZ Milled t 0 0 395,000 752,600 912,000
Tonnes
Kimberley t 0 0 40,000 397,400 272,000
Reef &
Channel
Facies Milled
Tons
Total RoM t 0 0 435,000 1,150,000 1,184,000
Tons
Average RoM g/t 0 0 7.5 6.0 6.5
Grade
Contained g 0 0 3,147,279 5,544,682 6,652,923
Gold BPLZ
Recoveries
BPLZ % 87% 87% 87% 87% 87%
Kimberley % 95% 95% 95% 95% 95%
Reef &
Channel
Facies
Total Gold oz - - 91,563 195,610 218,983
Total Revenue R,000 - - 379,249 810,210 907,019
Royalty - - 11,377 24,306 27,211
Total R`000 7,145 7,174 86,701 227,405 267,652
Operating
Cost
Net Operating R`000 (7,145) (7,174) 281,170 558,498 612,156
Income
(before
Capital)
Project R`000 (157,047) (395,616) (193,452) (116,365) (38,021)
capital
Net operating R`000 (163,429) (402,790) 87,718 442,133 574,135
taxable
income
Cumulative R`000 (249,010) (651,800) (564,082) (121,949) 452,187
taxable
income
Taxation R`000 - - - - (131,134)
Net cash flow R`000 (163,429) (402,790) 87,718 442,133 443,001
(real)
Financial Year continued
2012 2013 2014 2015 2016
840,000 785,000 735,000 845,000 125,000
360,000 415,000 465,000 310,000 1,593
1,200,000 1,200,000 1,200,000 1,155,000 126,593
5.4 5.5 4.9 4.1 5.1
5,213,659 4,833,409 3,523,081 3,277,694 640,883
87% 87% 87% 87% 87%
95% 95% 95% 95% 95%
184,916 190,070 169,460 134,880 18,142
765,916 787,265 701,896 558,670 75,142
22,977 23,618 21,057 16,760 2,254
259,987 258,470 257,492 224,593 73,388
482,951 505,177 423,347 317,316 -500
(30,828) (9,251) (7,295) (2,142) -
452,124 495,926 416,053 315,174 (500)
904,310 1,400,236 1,816,289 2,131,463 2,130,963
(131,116) (143,819) (120,655) (91,400) 145
321,008 352,108 295,397 223,773 (355)
Sensitivity Analysis
The following tables show the NPV of the real cash flows as derived from the
financial model for the project. The tables illustrate that the project is
neither capital nor operating cost sensitive. In summary they include the
following:
The variation in NPV with discount factors (Table 6).
The variation in NPV based on single parameter sensitivities (Table 7). The
sensitivity of the project to changes in gold price or head grade can be seen
in the variation of revenue. The sensitivity to variations in operating cost
and capital expenditure is also presented.
Table 6: Modder East Project - variation of real NPV with discount factors.
Valuation Basis Alternative
Scenarios
Discount
Factor US$629/oz Au US$500/oz Au US$629/oz Au
(%)
ZAR6.585=US$1.00 ZAR7.00=US$1.00 ZAR7.00=US$1.00
0% 1,598.6 1,071.9 1,812.7
5% 1,135.5 727.1 1,301.6
8% 924.6 570.5 1,068.6
10% 805.3 482.0 936.7
15% 565.3 304.8 671.2
US$720/oz Au US$900/oz Au
ZAR7.00=US$1.00 ZAR7.00=US$1.00
2,335.3 3,369.0
1,705.4 2,502.9
1,417.9 2,107.1
1,255.0 1,882.8
926.7 1,429.7
Table 7: Modder East Project - real NPV, single parameter sensitivity.
Sensitivity -30% -20% -10% 0% 10% 20% 30%
Range
Currency ZARm ZARm ZARm ZARm ZARm ZARm ZARm
Variation
in NPV @ 8%
DCF
Revenue 236.8 467.6 696.1 924.6 1,153.1 1,379.8 1,606.3
Operating 1,156.4 1,079.1 1,001.8 924.6 847.3 770.1 692.8
Cost
Capital 1,109.6 1,048.6 987.0 924.6 862.2 799.7 737.3
Cost
Mining Rights
Aflease Gold holds an old order mining right (Mining Licence ML15/2004), which
is valid until April 29, 2009. An application for conversion to a new order
mining right in terms of the Minerals and Petroleum Resources Development Act
No 28 of 2002 ("MPRDA") will be lodged in due course.
A temporary water use licence has been granted and approval of the permanent
water use licence application is awaited.
The surface rights for the project have been secured for a period of 20 years
terminating in 2026.
Qualified Person
HG (Wally) Waldeck, a Partner with SRK, is a Qualified Person for the purposes
of NI 43-101 and has audited all information relating to the feasibility study
and has reviewed the contents of this news release. Mr. Waldeck verified such
data as he deemed necessary for the purpose of updating the resource estimates
and no limitations were placed on such verification activities.
About Aflease Gold
Aflease Gold is a South African gold resource company listed on the JSE Limited
(the Johannesburg stock exchange). The company owns the Modder East Gold
Project, currently under construction, as well as the Sub Nigel, New
Kleinfontein, Turnbridge and the Holfontein Gold Projects, all on the East
Rand; the Ventersburg Gold Project in the Free State gold field; and the
Etendeka Gold Project in Namibia. Aflease Gold was formed in January 2006
through the reverse takeover of Sub Nigel Gold Mining Company by New
Kleinfontein Mining Company, then a wholly-owned subsidiary of Uranium One Inc.
The company is currently owned as to approximately 67.3% by Uranium One and has
a market capitalization of approximately ZAR 1.5 billion.
For further information, please contact:
Neal Froneman Jean Nortier
President and Chief Executive Officer Chief Financial Officer
Tel: + 27 11 482 3605 Tel: +27 11 482 3605
Cautionary Statement
This News Release includes certain "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995 and "forward-
looking information" within the meaning of applicable Canadian legislation. All
statements other than statements of historical fact included in this release
including, without limitation, the estimates and projections incorporated into
the feasibility study, estimates of mineral reserves and resources, and
statements regarding future plans and objectives of Aflease Gold are forward-
looking statements (or forward-looking information) that involve various risks
and uncertainties. There can be no assurance that such statements will prove to
be accurate and actual results and future events could differ materially from
those anticipated in such statements. Important factors could cause actual
results to differ materially from Aflease Gold`s expectations. Such factors
include, among others, the actual results of exploration activities, actual
results of reclamation activities, the estimation or realization of mineral
reserves and resources, the timing and amount of estimated future production,
costs of production, capital expenditures, costs and timing of the development
of new deposits, availability of capital required to place Aflease Gold`s
properties into production, conclusions of economic evaluations, changes in
project parameters as plans continue to be refined, future prices of
commodities, possible variations in ore grade or recovery rates, failure of
plant, equipment or processes to operate as anticipated, accidents, labour
disputes and other risks of the mining industry, delays in obtaining
governmental approvals, permits or financing or in the completion of
development or construction activities, Aflease Gold`s hedging practices,
currency fluctuations, title disputes or claims and limitations on insurance
coverage. Although Aflease Gold has attempted to identify important factors
that could cause actual results to differ materially, there may be other
factors that cause results not to be as anticipated, estimated or intended.
In addition, this news release uses the terms "indicated resources" and
"inferred resources" as defined in accordance with the SAMREC Code (South
African Code for Reporting of Mineral Resources and Mineral Reserves prepared
by the South African Mineral Resource Committee) (SAMREC) under the auspices of
the South African Institute of Mining and Metallurgy effective March 2000 or as
amended from time to time.
A mineral reserve is the economically mineable part of a measured or indicated
resource demonstrated by at least a preliminary feasibility study. This study
must include adequate information on mining, processing, metallurgical,
economic and other relevant factors that demonstrate at the time of reporting
that economic extraction can be justified. A mineral reserve includes diluting
materials and allows for losses that may occur when the material is mined. A
proven mineral reserve is the economically mineable part of a measured resource
for which quantity, grade or quality, densities, shape and physical
characteristics are so well established that they can be estimated with
confidence sufficient to allow the appropriate application of technical and
economic parameters to support production planning and evaluation of the
economic viability of the deposit. A probable mineral reserve is the
economically mineable part of an indicated mineral resource for which quantity,
grade or quality, densities, shape and physical characteristics can be
estimated with a level of confidence sufficient to allow the appropriate
application of technical and economic parameters to support mine planning and
evaluation of the economic viability of the deposit.
A mineral resource is a concentration or occurrence of natural, solid,
inorganic or fossilized organic material in or on the earth`s crust in such
form and quantity and of such a grade or quality that it has reasonable
prospects for economic extraction. The location, quantity, grade, geological
characteristics and continuity of a mineral resource are known, estimated or
interpreted from specific geological evidence and knowledge. A measured mineral
resource is that part of a mineral resource for which quantity, grade or
quality, densities, shape and physical characteristics can be estimated with a
level of confidence sufficient to allow the appropriate application of
technical and economic parameters to support mine planning and evaluation of
the economic viability of the deposit. The estimate is based on detailed and
reliable exploration, sampling and testing information gathered through
appropriate techniques from locations such as outcrops, trenches, pits,
workings and drillholes that are spaced closely enough to confirm both
geological and grade continuity. An indicated mineral resource is that part of
a mineral resource for which quantity, grade or quality, densities, shape and
physical characteristics can be estimated with a level of confidence sufficient
to allow the appropriate application of technical and economic parameters to
support mine planning and evaluation of the economic viability of the deposit.
The estimate is based on detailed and reliable exploration and testing
information gathered through appropriate techniques from locations such as
outcrops, trenches, pits, workings and drillholes that are spaced closely
enough for geological and grade continuity to be reasonably assumed. An
inferred mineral resource is that part of a mineral resource for which quantity
and grade or quality can be estimated on the basis of geological evidence and
limited sampling and reasonably assumed, but not verified, geological and grade
continuity. The estimate is based on limited exploration and sampling gathered
through appropriate techniques from locations such as outcrops, trenches, pits,
workings and drillholes.
Mineral resources which are not mineral reserves do not have demonstrated
economic viability. Investors are cautioned not to assume that all or any part
of the mineral deposits in the measured and indicated resource categories will
ever be converted into reserves. In addition, "inferred resources" have a great
amount of uncertainty as to their existence and economic and legal feasibility.
It cannot be assumed that all or any part of an inferred mineral resource will
be ever be upgraded to a higher category. Under South African rules, estimates
of inferred mineral resources may not form the basis of feasibility or pre-
feasibility studies or economic studies except under conditions noted in the
SAMREC Code. Investors are cautioned not to assume that all or any part of an
inferred resource exists or is economically or legally mineable.
No stock exchange, securities commission or other regulatory authority has
approved or disapproved the information contained herein.
For more information on Aflease Gold, please visit www.afleasegold.com
Date: 03/10/2007 11:22:50 Produced by the JSE SENS Department.
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